Lyft Announces Private Offering of $650 million of Convertible Senior Notes and Capped Call to Increase Effective Conversion ...
May 12 2020 - 7:00AM
Lyft, Inc. (“Lyft”) (NASDAQ: LYFT) today announced its intention to
offer, subject to market conditions and other factors, $650 million
aggregate principal amount of Convertible Senior Notes due 2025
(the “notes”) in a private offering (the “offering”) to persons
reasonably believed to be qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”). Lyft also expects to grant the initial
purchasers of the notes a 13-day option to purchase up to
an additional $97.5 million aggregate principal amount of the
notes. The notes will be senior, unsecured obligations of
Lyft, and interest will be payable semi-annually in arrears. The
notes will be convertible into cash, shares of Lyft’s Class A
common stock or a combination thereof, at Lyft’s election. The
interest rate, conversion rate and other terms of the notes are to
be determined upon pricing of the offering.
In connection with the pricing of the notes, Lyft expects to
enter into privately negotiated capped call transactions with one
or more of the initial purchasers and/or their respective
affiliates and/or other financial institutions (the “option
counterparties”). Lyft anticipates that the cap price of the capped
call transactions will initially represent a premium of
approximately 150% over the last reported sale price of the Class A
common stock on the pricing date of the offering. The capped call
transactions will cover, subject to anti-dilution adjustments, the
number of shares of Class A common stock underlying the notes
sold in the offering. The capped call transactions are generally
expected to reduce potential dilution to Lyft’s Class A common
stock upon any conversion of notes and/or offset any cash payments
Lyft is required to make in excess of the principal amount of
converted notes, as the case may be, with such reduction and/or
offset subject to a cap.
Lyft has been advised that, in connection with establishing
their initial hedges of the capped call transactions, the option
counterparties or their respective affiliates expect to purchase
shares of Lyft’s Class A common stock and/or enter into
various derivative transactions with respect to the Class A
common stock concurrently with or shortly after the pricing of the
notes. This activity could increase (or reduce the size of any
decrease in) the market price of the Class A common stock or
the notes at that time. In addition, the option counterparties or
their respective affiliates may modify their hedge positions by
entering into or unwinding various derivatives with respect to the
Class A common stock and/or purchasing or selling the
Class A common stock or other securities of Lyft in secondary
market transactions following the pricing of the notes and prior to
the maturity of the notes (and are likely to do so following any
conversion, repurchase or redemption of the notes, to the extent
Lyft exercises the relevant election under the capped call
transactions). This activity could also cause or avoid an increase
or a decrease in the market price of the Class A common stock
or the notes, which could affect the ability of noteholders to
convert the notes and, to the extent the activity occurs following
a conversion or during any observation period related to a
conversion of notes, it could affect the number of shares and value
of the consideration that noteholders will receive upon conversion
of the notes.
Lyft intends to use a portion of the net proceeds from the
offering to pay the cost of the capped call transactions described
above. If the initial purchasers exercise their option to purchase
additional notes, Lyft expects to use a portion of the net proceeds
from the sale of such additional notes to enter into additional
capped call transactions with the option counterparties. Lyft
intends to use the remainder of the net proceeds of the offering
for general corporate purposes, which may include working capital,
capital expenditures, and potential acquisitions and strategic
transactions. However, it has not designated any specific uses and
has no current agreements with respect to any material acquisition
or strategic transactions. The notes will only be offered to
persons reasonably believed to be qualified institutional buyers
pursuant to Rule 144A under the Securities Act. Neither the notes
nor the shares of Lyft’s Class A common stock potentially
issuable upon conversion of the notes, if any, have been, or will
be, registered under the Securities Act or the securities laws of
any other jurisdiction, and unless so registered, may not be
offered or sold in the United States except pursuant to an
applicable exemption from such registration requirements. This
announcement is neither an offer to sell nor a solicitation of an
offer to buy any of these securities and shall not constitute an
offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful. Investor
Contact:Shawn Woodhullinvestor@lyft.com Media
Contact:Adrian Durbin / Alexandra
LaMannapress@lyft.com
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